Schwab Study Highlights Need for Fall Financial Refresher

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SAN FRANCISCO--(BUSINESS WIRE)--Since the market meltdown of 2008, investors have become increasingly aware of their finances — with 51 percent of investors now thinking about their finances daily, as opposed to just 27 percent prior to the downturn, according to Schwab’s Make the Move survey. This appetite for engagement, coupled with the optimism around a market recovery, heightens the need for a financial refresher in order to translate thinking into positive action. In the spirit of back to school, parents and investors alike should consider enrolling in their own version of Personal Finance 101.

“We’re seeing clients take a much larger interest in understanding the many nuances of their finances,” said Michael Garner, Financial Consultant from Schwab’s Atlanta branch. “With the anniversary of the worst of the market downturn approaching, the time is ripe for investors to bolster their financial foundations.”

Suggested Fall Schedule

As the country begins to reflect on lessons learned from the recession, Garner recommends that investors review the financial basics through some coursework of their own.

Home Economics

The recession has taught many consumers to better monitor their finances. In fact, the Make the Move survey shows that within the next year, nearly half (45 percent) of respondents are vowing to set stricter budgets for themselves or their households.

Homework: Set and follow a budget for your household in three steps:

Record your current sources of income and expenses

Review and adjust your spending

Stay on track

History

The Make the Move study shows that 46 percent of those surveyed plan on paying closer attention to how much money they invest and/or save during the next year. While many investors have learned to be more conscious of these areas, understanding the implications of past behavior is also important in informing future choices.

Homework: Work with your financial consultant to evaluate your spending and investing habits over the past year. After identifying trends, use this assessment to wean out discretionary spending moving forward.

Current Events

Over the past year, the stock market has proven to be anything but predictable. As a result, more than one-third of survey respondents (38 percent) indicate an interest in paying closer attention to the economy.

Homework:A number of resources — both online and off — are available for individuals who are interested in following the market, including the Market Insights section of Schwab.com, investment clubs and personal finance blogs can also help investors decipher market fluctuations.

Making a Move toward Better Financial Guidance

Beyond revealing the renewed interest in taking control of one’s finances, the Make the Move survey also uncovered investors’ dissatisfaction about their relationships with their current financial firms or brokers. In fact, one in four survey respondents are considering leaving their current arrangement. This finding emphasizes the importance of identifying a financial consultant that best suits an investor’s needs. Below are a number of questions that Garner recommends investors ask when evaluating a financial consultant.

How are you compensated?

What exactly do you mean by “advice”? What do I really get?

Do brokers in the firm independently give advice, or are they guided by a firm philosophy?

What online tools and services do you offer?

Will I work with the same person every time?

“The back-to-school months are an excellent time for individuals to take stock of their financial circumstances and be sure they are moving forward on sound financial footing,” continued Garner. “There are lessons that everyone can learn from the past year. Understanding and applying those lessons to future behavior is an important step for us all in successfully achieving our future financial goals.”

About the Survey

The Charles Schwab “Make the Move” Survey was conducted by Kelton Research between June 4 and June 8, 2009 using an email invitation and an online survey. Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 4.4 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.6 million client brokerage accounts, 1.5 million corporate retirement plan participants, 593,000 banking accounts, and $1.2 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Advisor Services division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at www.schwab.com. (0809-10395)